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COURSE OVERVIEW
REGRESSION DISCONTINUITIES
Major Assumption
The level and trend in the outcome above/below the threshold
would have continued absent the threshold
The Counterfactual
Outcome of Interest
Threshold
Change at
Threshold
Below Threshold
Above Threshold
Forcing Variable
Estimates
RD estimates whats known as a local average treatment
effect (LATE)
Comparing people just below to just above the threshold
Student Achievement
Vote Margin
Birth Year
Minute of birth
Many others
Statistical integrity
There should not be a discontinuity in the density of cases at the
threshold
Testing Assumptions
Other variables should be smooth through the threshold
Potential RD Biases
1. Co-intervention / Non-smooth curve
2. Instrumentation
3. Attrition
4. Manipulation of threshold
PERFORMING AN RD ANALYSIS
Forcing
Threshold
Forcing_Threshold
Outcome
Basic RD model
For threshold j and forcing variable k:
Outcome of Interest
Threshold
2 (RD estimate)
(intercept)
Below Threshold
Above Threshold
Forcing Variable
Running an RD Model
########################
# Modeling an RD
########################
# Fit the standard regression model
rd_model <- gls(outcome ~ forcing + threshold +
forcing_threshold,
data=data,
method="ML")
summary(rd_model)
Higher-order Polynomials
Often the relationship between the forcing variable and the
outcome on either side of the threshold will be non-linear
Solution: model in polynomial terms
Running an RD Model
#####################################
# Modeling an RD with square terms
#####################################
# Construct a square term on either side of the threshold
data$forcing_sq <- data$forcing^2
data$forcing_threshold_sq <- data$forcing_threshold^2
# Fit the standard regression model
rd_model <- gls(outcome ~ forcing + forcing_sq + threshold +
forcing_threshold + forcing_threshold_sq,
data=dataset,
method="ML")
summary(rd_model)
Modeling
Have to make decisions about range
Trade-off between linearity and data, or precision and bias as
Lee and Lemieux refer to it
Other considerations
Local linear regression
Kernel densities
Fuzzy RD designs
Presenting an RD Analyis
Common to present two figures:
Forcing variable and exposure to the intervention
Forcing variable and outcome
RD EXAMPLE: INCUMBENCY
Lee (2008)
Interested in the effect of incumbent party advantage
Uses data from US House of Representatives elections
Our data are from a replication by Caughey and Sekhon
Includes 7,598 elections from 1942 through 2006
RD estimate
Data Setup
state
year
dmargin
demwin
dwinnext
bin
1946
-6.218
22
1950
-4.146
23
1954
-5.118
23
1956
6.148
29
Setup Variables
# Setup square and cubic terms for forcing variable
dataset$dmargin2 <- dataset$dmargin^2
dataset$dmargin3 <- dataset$dmargin^3
# Setup interaction between forcing variable and threshold
dataset$dmargin_demwin <- dataset$dmargin * dataset$demwin
# Setup square and cubic terms for forcing variable * threshold
interactions
dataset$dmargin_demwin2 <- dataset$dmargin_demwin^2
dataset$dmargin_demwin3 <- dataset$dmargin_demwin^3
Preliminary Plot
###################################
# Preliminary Plot
###################################
# Setup bins for plotting
bins <- seq(-49,49,2)
# Get the mean within each bin
means <- tapply(dataset$dwinnext,dataset$bin,mean)
# Plot the results
plot(bins,means,
pch=19,
ylab="Probability of Winning Next Election",
xlab="Vote Margin in the Last Election",
xlim=c(-50,50),
col="lightblue")
# Add line at zero
abline(v=0,lty=2,col="grey")
Model 1 Results
Coefficients:
Estimate Std. Error t value Pr(>|t|)
(Intercept)
0.2362171 0.0096311 24.526
<2e-16 ***
dmargin
0.0051402 0.0003727 13.790
<2e-16 ***
demwin
0.5558085 0.0139324 39.893
<2e-16 ***
dmargin_demwin -0.0008619 0.0005163 -1.669
0.0951 .
Model 2 Results
Coefficients:
Estimate
(Intercept)
0.28847535
dmargin
0.01172643
dmargin2
0.00014036
demwin
0.44811150
dmargin_demwin -0.00053605
dmargin_demwin2 -0.00028161
Model 3 Results
Coefficients:
Estimate
(Intercept)
0.300040593
dmargin
0.014578041
dmargin2
0.000288379
dmargin3
0.000002045
demwin
0.385243821
dmargin_demwin
0.009250574
dmargin_demwin2 -0.001068132
dmargin_demwin3 0.000006539